Berkshire to Exchange Stake in Graham Holdings

By Ben Fox Rubin

Berkshire Hathaway Inc. plans to give back nearly all its ownership stake in Graham Holdings Co., the former owner of the Washington Post newspaper, as part of an asset exchange between the two companies.

Berkshire—a massive conglomerate with stakes in insurance, railroads and apparel makers—is a longtime investor in the company and had been Graham Holdings’ biggest shareholder, with a roughly 28% stake, or about 1.7 million shares, according to FactSet. The stake is valued at about $1.23 billion. Last month, Berkshire said it was in talks with Graham Holdings to exchange its stake in the company for assets.

The company agreed in principal to give back to Graham Holdings 1.6 million Class B shares in exchange for Miami-based TV station WPLG, a number of Berkshire shares currently held by Graham Holdings and some cash.

“I am sure this is a mutually beneficial transaction for both companies,” Berkshire Chief Executive Warren Buffett said. “While this transaction will greatly reduce our position in Graham Holdings, our admiration for the company and its management is undiminished.”

Graham Holdings sold the Post last year to Amazon.com Inc. founder Jeff Bezos for $250 million, but still holds interests in education—including the for-profit education unit Kaplan Higher Education—and television as well as its real estate and a few journalism properties.

“Warren Buffett’s 40-year association with our company has been extremely good for our shareholders. Naturally, the deal that we have put together is one that will be good for both companies,” said Donald E. Graham, chief executive of Graham Holdings.

Graham and Berkshire have a long history, as Berkshire owner Warren Buffett had a friendship with former Post publisher Katharine Graham and spent many years serving on the Post’s board. He gave up his director’s seat for a second and final time in 2011.